A bipartisan proposal in Congress would assist unpaid household caregivers make up some misplaced retirement revenue.
Under the invoice, individuals who had been out of the workforce for a minimum of one yr and acquired no pay for caring for a member of the family may make additional contributions to their retirement account in years previous to turning 50. To arrive on the age when the extra contributions would start, the eligible variety of years out of the workforce could be subtracted from age 50.
Under present legislation, there are annual contribution limits for retirement accounts, and beginning at age 50, staff could make additional catch-up contributions.
The invoice comes as caregiving is more and more seen a a serious public well being and financial challenge.
Care offered by unpaid household caregivers throughout the U.S. was valued at $600 billion in 2021, in keeping with AARP. That determine was primarily based on about 38 million caregivers offering a mean of 18 hours of care per week, for a complete of 36 billion hours, at a mean worth of $16.59 an hour, AARP stated.
“Individuals who leave the workforce to provide care for a loved one should not be penalized on their retirement and forced to do more with less later in life,” U.S. Rep. Chris Pappas, a Democrat from New Hampshire, stated in a press release. “This bipartisan legislation will allow caregivers to make catch-up payments to their 401(k), IRAs, and other accounts so they don’t lose out on valuable retirement savings as a result of the time they took to help a family member in need.”
Pappas launched the invoice, known as the Expanding Access to Retirement Savings for Caregivers Act, with U.S. Rep. Claudia Tenney, a Republican from New York, on Dec. 13. U.S. Rep. Debbie Lesko, a Republican from Arizona, was additionally an authentic co-sponsor.
“The burden of unpaid care needs continues to disproportionately fall on women, with devastating effects on health, well-being, and labor-force participation,” in keeping with analysis printed in JAMA Network. In the U.S., ladies present 2.2 occasions extra unpaid household caregiving than do males.
“Many individuals across the country take time away from work to care for a loved one, which can result in missed opportunities to save for retirement,” Tenney stated in a press release. “This would help us move away from a system that disadvantages caregivers and instead offer additional tools for them to contribute to their retirement savings.”
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And: Alone and unable to look after themselves: This is the plight of hundreds of thousands of older Americans
Source web site: www.marketwatch.com
